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Who really benefits from export processing zones? Evidence from Nicaraguan municipalities

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  • Picarelli, Nathalie

Abstract

Export processing zones are popular trade policies in developing countries, but there is limited empirical evidence on their local effects. This paper examines the impact of their establishment on the levels of per capita expenditure across Nicaraguan municipalities for the period 1993 to 2009. Using the time and cross-section variation of park openings in a difference-in-differences framework, I find that on average consumption levels increased by 10 to 12% in treated municipalities. Yet, average effects mask significant disparities across the expenditure distribution. The results suggest that the policy benefited the upper-tail the most: expenditure levels increased by up to 25% at the 90th percentile. At the opposite of the distribution, only the bottom decile registered a small positive effect of close to 10% across the period.

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  • Picarelli, Nathalie, 2016. "Who really benefits from export processing zones? Evidence from Nicaraguan municipalities," Labour Economics, Elsevier, vol. 41(C), pages 318-332.
  • Handle: RePEc:eee:labeco:v:41:y:2016:i:c:p:318-332
    DOI: 10.1016/j.labeco.2016.05.016
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    More about this item

    Keywords

    Export processing zones; Expenditure; Quantiles; Skills; Nicaragua;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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